Of waivers and optics

Aug 31, 2024 Features / Columnists, Peeping Tom

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Kaieteur News – We can find no better example of self-interest masquerading as magnanimity than the recent motion passed by the Georgetown City Council to bestow a generous reduction in municipal taxes on political parties. It does not take a discerning observer to see this motion for what it is: a self-interest decision and a blatant conflict of interest.

The People’s Progressive Party/Civic (PPPC), and Bharrat Jagdeo are not going to lose the opportunity to milk political capital out of this ill-advised motion. They will, as they have done, paint the motion as self-serving, passed by the very party that stands to benefit.

In truth, the PNCR’s councillors, who hold a majority in the Council, have only themselves to blame for the bad optics of this decision. To propose and pass a motion that directly benefits one’s own party to the tune of hundreds of percentage points less in taxes than would otherwise be due is, to put it mildly, unseemly. It reeks of an ethical lapse.

This reduction, from a commercial rate of 275% of assessed taxes to an institutional rate of just 25%, is no small concession. It represents a substantial waiver, one that raises questions about the motivations and intentions behind the motion which was passed with the support of the majority PNCR councillors.

The PNCR councillors may argue that this move is designed to relieve political parties of undue financial pressure or to treat them as institutions rather than businesses. But in a city struggling to make ends meet, and where businesses are saddled with relatively exorbitant taxes, such an argument falls flat. It is an insult to those who have borne the brunt of the city’s financial mismanagement, a mismanagement that has seen the infrastructure crumble, services deteriorate, and the quality of life for its residents steadily decline under successive PNCR-controlled councils.

It is incumbent upon political parties to set an example, to lead by demonstrating a commitment to the principles of fairness and responsibility.  The notion that political parties should benefit from a tax reduction at a time when ordinary citizens are not, recalls the case of the APNU+AFC Ministers approving a 50% increase in salaries for themselves.

If anything, political parties, which rely on public support and often claim to represent the interests of the common man, should be at the forefront of paying their full tax. These parties should not seek to benefit from a reduced rate until a similar concession is offered to ordinary ratepayers.

The decision to reduce taxes for political parties is not only morally dubious but also strategically unsound. At a time when the Council should be focusing on enhancing revenue collection to fund vital services, it is instead opting to forego potential income. This myopic approach does nothing to address the systemic issues plaguing the city’s finances.

But there is also another fundamental concern. What Georgetown needs is not piecemeal solutions that benefit a select few, but comprehensive reform that ensures all sectors contribute equitably to the upkeep of the city.

Businesses, which are already overburdened by the existing tax structure, bear the lion’s share of the financial burden. They are subject to relatively high rates and taxes. This is compounded by steep penalties for late payments. The challenges faced by these businesses are further exacerbated by the rampant illegal vending that goes unchecked in the city. Vendors, who pay a nominal cleaning fee, are allowed to set up shop directly in front of established businesses, undercutting them and creating an uneven playing field.  In the meantime, garbage is piling up in the city, including in residential areas.

To address these issues, this column has previously advocated for the implementation of a flat tariff on the square feet of businesses and residential areas. There can be different rates for high-end and prime commercial areas. For example, businesses in Regent Street should pay higher rates than say businesses in Kitty.

A separate flat rate, say a $100 per every drum, for garbage collection should also be introduced. This should be applicable to every household and business, regardless of the nature of their economic activity. It should be treated as a service charged and should cover the cost of garbage collection.

Such measures would provide a stable and predictable source of income for the city, while also ensuring that the burden of maintaining cleanliness and order is shared equitably among all residents and businesses. A sanitation rate, uniformly applied, would ease the financial strain on the city’s coffers and eliminate the need for arbitrary and politically motivated tax waivers.

The freedom which the Council is able to waive and alter rates needs to be checked in the public interest.  It is high time for the central government to intervene legislatively. The current arrangements leave citizens at the mercy of local councils. The government must take steps to protect the public interest by enacting legislation that governs the imposition and waiver of rates and taxes.

One proposal is to establish a regulatory body that oversees municipal tax policies, ensuring that decisions are made transparently and based on sound financial principles, rather than political expediency. Such a body would provide a check against the kind of self-serving maneuvers that have come to characterize the Georgetown City Council’s approach to governance.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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• Bharrat Jagdeo, municipal taxes, Observer, People’s Progressive Party/Civic (PPPC), Political Parties

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